Waste Crime – Waste Risks Gaps In Meeting the Global Waste Challenge

November 29, 2015

Waste covers a very wide spectrum of discarded materials ranging from municipal,
electrical and electronic, industrial and agricultural, to new types including counterfeit
pesticides. It also includes anything in size and scale from decommissioned
ships, oil or liquid wastes, hundreds of millions of mobile phones to billions of
used car tires.

With rising global population, urbanisation and consumption,
the amount of waste continues to increase, providing vast environmental,
social, health, economic and even criminal challenges
of unknown proportions. Due to high costs of treating
and disposing hazardous and other wastes, weak environmental
regulations, poor enforcement and low environmental
awareness, illegal transboundary movements of hazardous
wastes and other wasted from developed countries to developing
countries have become an increasing global concern.
Despite the significant efforts undertaken in the framework of
the Basel, Rotterdam and Stockholm Conventions and by some
government agencies, detailed knowledge of the illegal transnational
flows remains limited and at best fragmented.

The current publication is based on the latest research findings,
and involvement from practitioners such as the formal waste
sector, inspectors, law enforcement officers and prosecutors. It
provides insight into the possible scale and features of the main
drivers, along with case studies. It is not an exhaustive or fully
comprehensive overview, but it intends to identify major areas
of policy deficits and challenges that require further investigation,
policy action and intervention for prevention and damage
control, as well as to identify opportunities.

The global waste market sector from collection to recycling
is estimated to be USD 410 billion a year (UNEP 2011),
excluding a very large informal sector. In common with any
large economic sector, there are opportunities for illegal activities
at various stages of legal operations.
The exact size of the global illegal waste trade is unknown.
The latest research on e-waste, a product of one of the world’slargest and fastest growing manufacturing industries, estimates
that about 41.8 million metric tonnes (Mt) of e-waste
was generated in 2014 and that this number will increase
to 50 Mt already by 2018 (Balde et al. 2015). According to
various estimates, the amount of e-waste properly recycled
and disposed of ranges between 10 to 40 per cent according
to different estimates (UNODC 2013). The presence of the
informal economy makes solid estimates of the value for the
sector difficult. However, using an estimate previously used
by INTERPOL of an average value of e-waste at USD 500 per
tonne (INTERPOL 2009), the range of e-waste handled informally
or unregistered, including illegally, amounts to USD
12.5-18.8 billion annually. It is not known how much of this
e-waste that is subject to the illegal trade or simply dumped.
The Basel, Rotterdam and Stockholm Conventions provide
the forefront of our global efforts in tracking and managing
hazardous waste and chemicals, along with other initiatives
such as the UN Solving the E-waste Problem (StEP) Initiative
on electronic waste.

The Basel Convention is the main
global umbrella institution that regulates the transboundary
movement and disposal of hazardous and other wastes.
One of its provisions includes an obligation for Parties to
cooperate in cases where illegally shipped waste has to be
repatriated. Regional conventions such as the Bamako
Convention, a regional agreement for the African region,
and the Waigani Convention for the South Pacific region,
are additional legal mechanisms aimed at preventing illegal
trade. Lack of legal clarity may lead to both unintentional
and intentional breaches of the regulations dealing with
waste management and transboundary movement. Furthermore,
the Basel Convention allows the Parties to define the
wastes in addition to the waste lists under the Convention,
and recognizes the right of the Parties to adopt their own
national legislation to prevent and control of hazardous
wastes and other wastes (Article 3.1 and Article 4.1). These
grey zones and different national legislations are clear challenges
for the law enforcement community. Enforcement is
undoubtedly also a challenge.

The report has a global scope, but it also has a European focus
mainly for two reasons. First, Europe has a high consumption
level making the region one of the major waste producers in
the world. Second, the issue of waste is Gaining increasing
attention in the region. Some European countries have a lot
of experience and knowledge due to a high incidence of waste
crime prosecutions. The assessment focuses on these countries
with some illustrations from other regions.

This Rapid Response Assessment report describes the results
of the present enforcement efforts, and stops short of delineating
actual global illegal waste trade patterns. The assessment
highlights known cases and available information. It does not
follow that countries and regions that are not discussed in
detail are less affected by the problem of waste crimes. The
activities in these countries may simply be monitored to a
lesser extent.

Serious crimes may take place in any part of the waste chain,
including exposing populations to toxic material through
improper handling and disposal. They are not necessarily
associated with breach of soft, unclear or waste environmental
regulations. Rather, serious crimes such as tax fraud
or money laundering, take place as the large-scale economic
and transport sector of waste receives very little attention.
Furthermore, larger business interests may deliberately
bypass environmental legislation and tax laws for profit. In
some cases some recyclable waste such as plastics, paper or
metals may be used directly to cover or hide hazardous waste,
although the scale of this remains unknown. Companies
can be paid significant sums for appropriate treatment, but
instead dump large quantities mixed with regular waste for
substantial profit. Thus, these companies may commit environmental
crimes (with important health implications), such
as fraud through falsification of customs forms, or tax fraud
through over- or under invoicing costs and incomes.

Waste is also deliberately classified as other items to deceive
law enforcement authorities. This is often done by using
non-hazardous waste codes for hazardous wastes or using
product codes for hazardous wastes. As e-waste is largely
categorized as hazardous due to the presence of toxic materials
such as mercury, lead and brominated flame retardants,
it requires proper management. E-waste may also contain
precious metals such as gold, copper and nickel and rare
materials of value such as indium and palladium making it
an attractive trade. However, in practice, many shipments of
e-waste are disguised as second hand goods.

Inadequate resources for monitoring, enforcement and low
penalties provide an environment of major opportunity for
transnational organized criminal actors to commit large-scale
breaches of environmental laws. As volumes are unknown,
this situation in effect generates a permissive environment
for tax fraud.

Key destinations for large-scale shipments of hazardous
wastes, such as electrical and electronic equipment, include
Africa and Asia. In West Africa, a significant recipient is Ghana
and Nigeria, but high volumes also go to, but not limited to,
Cote D’Ivoire, and the Republic of the Congo. South Asia and
Southeast Asia also appear to be major regional destinations,
including, but not limited to, China, Hong Kong, Pakistan,
India, Bangladesh, and Vietnam.

The key driver for illegal waste shipments to destination countries
is the profit generated from payments for safe disposal
of waste that in reality is either dumped or unsafely recycled.
It may, however, also include an additional profit from recycling
certain components. While the latter appears to be positive,
in practice it develops environments that are hazardous
to health, and typically leads to subsequent dumping of
majority of the waste. Profit is the fundamental objective of
the different players in illegal waste shipments. These may
include exporters, middlemen and informal recyclers. Their
activities are usually structured along a legal chain of operations,
albeit where the players take advantage of loopholes in
control regimes and actual control capacities.

Both small- and large-scale smuggling techniques can be
observed all over the world, from organized truck transport
across Europe and North America to the use of major smuggling
hubs in South Asia, including widespread container
transport by sea. Large numbers of abandoned waste
containers with unknown contents are stored in different
ports in Asia and in other parts of the world. Dumping at
sea or even more so in ports is logistically easy. The use of
such methods warrants much further investigation given the
possible scale of tax fraud and larger organized breaches of
environmental regulations.

Stringent enforcement in one country commonly leads to
changes in illegal shipment routes through neighbouring
countries. Strong enforcement practices, such as China’s
Green Fence campaign, have been changing the traditional
routes for illegal waste shipments.

The shipment of toxic material and electronic waste poses a
particular acute threat for involvement and growth of organized
crime. It entails money laundering, increased criminal
proceeds revenues and an opportunity for further diversification
of criminal proceeds. There is likely no other area of
organized crime that provides such a significant opportunity
for money laundering and tax fraud as waste disposal, with
its near complete lack of monitoring, statistics or reporting.

Without any significant enforcement efforts dedicated to the
mapping, investigation and possible prosecution of criminals
involved in illegal waste collection, illegal dumping and transport
activities are likely to grow, as will the associated threats
to human health and environmental security.

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